Korea Asset Management Corporation (Attorney Kim Jong-soo et al., Counsel for the plaintiff-appellant)

Defendant 1 and one other

November 24, 2005

Daejeon District Court Decision 2004Da54180 Delivered on May 10, 2005

1. The plaintiff's appeal against the defendants is dismissed in entirety.

2. The costs of appeal are assessed against the plaintiff.

The judgment of the first instance shall be amended as follows:

(2) From August 28, 197, 20, 00, 197 to 10.2.9: 2.0% per annum from 9.2.0 to 19.0, 9% per annum from 9.2.0 to 19.0, 197, 18% per annum from 9.2.0 to 9.0, 197, 29% per annum from 9.0 to 19.7.0, 9% per annum from 9.29 to 19.0, 29% per annum, and 9% per annum from 9.2.0 to 19.0, 197, 29 to 19.9, 9% per annum, and 9% per annum from 19.29 to 29.9, 198, respectively.

1. Basic facts

The following facts may be acknowledged, either in dispute between the parties or in Gap evidence 1, 2 (including each number), 3 through 5, 6-1, 2, 3, 7, 8, 9 through 11 (including each number), together with the whole purport of the pleadings:

A. He entered into a transaction agreement with Defendant 2 on the discount of notes, and paid to Defendant 2 two promissory notes (the Promissory Notes, the place of payment, and the place of payment) of the amount of KRW 300,000 (the Promissory Notes, the date of issue, September 19, 196, the date of payment, March 4, 1997) issued by each of the Korea Steel Industry Co., Ltd. (hereinafter referred to as the “Korea Steel Co., Ltd.) and KRW 200,000,000 (the issuing date, October 28, 1996; April 3, 1997; and the place of payment and the place of payment) after deducting the amount from the amount of the discount fees set forth therein.

B. After that, when the payment of the Promissory Notes was presented at the place of payment on the date of the payment, but the payment was refused due to the shortage of balance, the payment was concluded between Defendant 2 and Defendant 2 on March 28, 1997 and April 8 of the same year with each general loan agreement with the following contents, and Defendant 2 was paid the debt owed by Defendant 2 to the interesting bank due to the discount transaction of the Promissory Notes, while the Promissory Notes continued to be held as security for each of the following loan claims:

(1) Loans made on March 28, 1997: loans of KRW 300,00,000, interest rate of KRW 15.5% per annum, maturity of 16 June 1997, and interest interest rate of KRW 18% per annum, and thereafter the maturity was extended on September 26, 1997 (hereinafter “the first loans”).

(2) Loans made on April 8, 1997: loans amounting to 200,00,000, interest rate of 15.5% per annum, and interest rate of 18% per annum on July 3, 1997; and thereafter, the period of repayment was extended on October 3, 1997 (the following "second loans" and the above first and second loans "the instant loans").

(3) At the time of the instant loan, Defendant 1 guaranteed each of the joint and several liability within the limit of KRW 390,000,000 with respect to the first loan obligation to Choung Bank, and KRW 260,000 with respect to the second loan obligation, respectively.

(4) The bank credit transaction basic terms and conditions applicable to the loan contract of this case include the rate of interest, discount fees, guarantee fees, fees, damages for delay, etc. incurred from the loan, calculation method, and the timing and method of payment, within the highest rate prescribed by Acts and subordinate statutes, and the bank shall be deemed to comply with the above restriction, and if the bank amends such limit, the bank shall be deemed to comply with the obligor. The interest rate for delay determined by the lending bank shall be 18% per annum from August 5, 1997 to December 11, 197; 20% per annum from December 12, 1997 to December 25, 197; 25% per annum from December 26, 197 to October 6, 198; and 20% per annum from October 7, 198 to January 28, 199.

(5) Meanwhile, on the other hand, Choung Bank received interest on the first loan from Defendant 2 from June 26, 1997 to August 27, 1997 from August 197, and received interest on the second loan from August 4, 1997 from July 3, 1997 to August 4, 197, and appropriated KRW 6,498,000 for the principal of the first loan.

C. On September 29, 1998, the Choung Bank transferred the instant loan claim to the Plaintiff (former Korea Asset Management Corporation) (hereinafter “former Korea Asset Management Corporation”) and notified the Defendants of the assignment of claim on November 17, 1998.

D. After that, in the company reorganization procedure for the Han Steel, the Plaintiff reported the claim of this case as reorganization claim and appropriated the total amount of 289,898,660 won (=2,902,177 won + 14,912,934 won on December 28, 2001; 14,912,934 won on December 31, 2002; 19,83,913 won on December 31, 2003; 222,373,768 won on November 8, 2004; 289,898,60 won on November 22, 2004; ＋ 14,912,934 won + 31,983,92,937 won on December 29, 200; ＋ 3198,37,370 won on December 37, 2003).

E. At present, the first loan is a final and conclusive interest and damages for delay incurred with respect to the principal already repaid in 3,603,340 won and the interest and damages for delay incurred after August 28, 1997, which is the day following the date of final receipt of interest for the said outstanding principal and the second loan, and the interest and damages for delay incurred after August 5, 1997, which is the day following the date of final receipt of interest for the said outstanding principal.

2. The assertion and judgment

A. Determination on the cause of the claim

According to the above facts, barring any special circumstance, Defendant 2 is obligated to pay the Plaintiff the principal of the instant loan of KRW 585,949,890 (the remaining principal of the instant loan of KRW 3,603,340 + the principal of the second loan of KRW 200,00,000 + interest on the first loan of KRW 382,346,550 + interest and delay damages on the first loan of KRW 382,346,50) and interest and delay damages on each of the loans from the day following the date of final receipt of interest on each of the loans, and Defendant 1 is jointly and severally liable with Defendant 2 within the scope of the guarantee limit.

B. Determination of the defendants' assertion

(1) The Defendants asserted that since the Plaintiff received the full amount of the instant bill in the company reorganization procedure for the Han Steel, the instant loan claims and joint and several surety claims, which are the underlying claim, were extinguished.

According to the above facts, in the company reorganization procedure for the Han Steel Co., Ltd., the plaintiff reported the claim of this case as reorganization claim and received a total of KRW 289,898,660, which is part of the reorganization claim, and appropriated it as part of the principal of the first loan. However, as seen above, there is no evidence to acknowledge that the plaintiff received the full amount of the bill of this case in excess of the above amount or received the full repayment of the loan claim of this case. Thus, the above assertion by the defendants is without merit.

(2) Next, the Defendants asserted that all of the instant loan claims and joint and several guarantee claims have expired by prescription.

The plaintiff's claim for the loan of this case is governed by the commercial prescription of five years from the commercial credit incurred from commercial activities, such as lending of Hong Bank, which is a merchant. The payment period for the loan of this case is the same as mentioned above, and October 3, 1997. The plaintiff's lawsuit of this case is clearly filed on October 27, 2004, which is five years after each of the above payment period. Thus, the above claim for the loan of this case and the interest and delay damages claim corresponding to the above interest and delay damages claim of this case were all extinguished (Articles 167 and 183 of the Civil Code), and accordingly, the above joint and several guarantee claim of the defendants is also extinguished.

In this regard, the plaintiff asserts that the period of extinctive prescription of the claim of this case, which the plaintiff acquired for the purpose of securing the claim of this case, has expired, so long as the plaintiff exercised the claim of this case on five occasions from November 2, 199 to November 8, 2004 in the company reorganization procedure for the Han Steel and collected part of this case by exercising the claim of this case on five occasions from November 2 to November 2, 2004, the period of extinctive prescription of the claim of this case was interrupted. However, the interruption of prescription is only limited to the parties involved in the interruption act and their successors. Since the plaintiff exercised the claim of this case in the company reorganization procedure for the Han Steel and Steel, it cannot be deemed that the extinctive prescription of the claim of this case

In addition, Defendant 2 delegated all rights to the Promissory Notes at the time of the instant loan, and the Plaintiff’s act of collecting the Promissory Notes and receiving part of the amount was ultimately represented by Defendant 2 pursuant to the delegation by Defendant 2. As such, Defendant 2, to whom the effect of the Plaintiff’s act of acting as an agent belongs, shall be deemed to have acknowledged the instant loan obligation at the time of the instant act of collecting the amount, or at least, the Plaintiff’s act of collecting the Promissory Notes against Defendant 2 (the Plaintiff’s assertion is unclear, and it appears to be the exercise of the right of recourse against Defendant 2, who is the endorser of the Promissory Notes). Accordingly, the Plaintiff asserts that the statute of limitations of the instant loan claim was interrupted.

According to the statement No. 12-1 and No. 2, Defendant 2, at the time of the loan of this case, may establish the fact that Defendant 2 prepared a written confirmation to delegate all the rights to the bill of this case to the Cho Heung Bank. However, according to the above fact-finding, Defendant 2 did not state the original bill of this case after endorsement and transfer to Heungungung Bank, or the purport that the above endorsement is delegation of collection, and thus, the Plaintiff, who was endorsed and transferred the bill of this case, was in a position to exercise all the rights to the bill of this case as his own right. Thus, in the company reorganization procedure for Han Steel Steel with only the existence of the above written confirmation, it is difficult to view that the Plaintiff collected the bill of this case on behalf of Defendant 2, and there is no other evidence to acknowledge it, and it cannot be deemed that the Plaintiff exercised the rights to the bill of this case with the Plaintiff’s collection act. Thus, the Plaintiff’s assertion is without merit.

3. Conclusion

Therefore, the plaintiff's claim against the defendants in this case is dismissed as it is without merit. The judgment of the court of first instance is unfair with different conclusions, but only the plaintiff appealed cannot change the judgment of the court of first instance disadvantageous to the plaintiff. Thus, only the plaintiff's appeal against the defendants is dismissed as without merit. It is so decided as per Disposition.

Judges Jo Nam-nam (Presiding Judge)